A recent CNN article explains how credit card users may still have leverage in negotiating lower interest rates despite the rhetoric coming from many of the larger U.S. credit card issuers. Many of those issuers have claimed that the recently passed Credit Card Accountability, Responsibility and Disclosure (CARD) Act would be devastating to customers, because it would require the companies to raise prices, and reduce consumer choices and access to credit cards. Interest rates have increased, but not as dramatically as increases prior to the enactment of the CARD Act legislation. In addition, credit card companies will be forced to adapt to the new rules that benefit consumers, and provide access to credit to a variety of customers, in order to stay in business.

In addition to being able to negotiate lower rates, there are other positive changes for consumers that have been occurring through CARD. The good news for us is that the CARD Act:

-Requires credit card companies to provide notice to customers before raising rates or fees;
-Requires monthly statements to show how long it will take to pay off your total balance if you are paying the minimum each month;
-Strongly limits advertisements for credit cards aimed at college students and young adults in general; and
-Requires mandatory consistent payment dates and times to be spelled out by credit card companies.


These developments are great, but CARD is not magic bullet that will miraculously eradicate the pitfalls of credit card use. Although the CARD Act may help to make the credit card playing field more level than it was previously, the reality is that as a consumer, you cannot beat the credit card companies. No amount of legislation will prevent providers of credit from making billions of dollars in interest off of credit card users, and it will not keep the vast majority of credit card holders from throwing ridiculous amounts of money down the drain.

Except for the most disciplined of credit card holders with the best of interest rates, the vast majority of people benefit very little from the use of credit cards. Even as it relates to building credit, many people do themselves more harm than good with credit cards. The reality is that you can build good enough credit to make major purchases simply by paying your bills on time beginning at a young age. It only takes a few times being late paying off a credit card balance to ruin any potential credit-building benefits.

The main thing that credit cards allow people to do is to spend money that they don't have, and pay for the ability to do it, which is not a benefit in the long run. Particularly in the black community, which is disproportionately targeted by all sorts of predatory lenders, limiting if not eliminating credit card use is ideal. Aside from the historical discriminatory barriers, one of the other main reasons that black people generally lag behind whites in regard to wealth is due to credit misuse and abuse. Although it doesn't excuse credit companies from mistreating black customers, the fact is that many of us often willingly enter into credit agreements foolishly with no serious thought of the long-term consequences.

If you still feel the need to keep an "emergency credit card," that is different (even though that is not really necessary if you have savings); However, we must break this cycle of giving away our wealth to credit card companies while many of us continue to struggle.